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Wednesday February 21, 2018

Finances

Best Buy Posts Strong Earnings

Best Buy Co., Inc. (BBY) announced its latest quarterly results on Tuesday, August 29. The company reported increases in both revenue and net income.

Best Buy reported revenue of $8.9 billion for the quarter. This is up from $8.5 billion during the same quarter last year.

"We are pleased today to report strong top and bottom line growth for the second quarter of fiscal 2018," said Best Buy chairman and CEO Hubert Joly. "Our higher-than-expected comparable sales of 5.4% were driven by stronger consumer demand for technology products and by the strong execution of our strategy."

Net income for the quarter was $209 million, or $0.67 per share. At this time last year, the company reported net income of $198 million, or $0.61 per share.

Best Buy announced on Thursday that it will be expanding its same-day delivery service to a total of 27 cities in the U.S. Customers who order items from the company's website currently have the option to pick up items in-store or have them shipped to their address. Best Buy began testing same-day delivery in 2015 and rolled it out to 13 cities in 2016.

Best Buy Co., Inc. (BBY) shares ended the week at $54.50, down 12.7% for the week.

Campbell's Revenue Slide Continues

Campbell Soup Company (CPB) released its quarterly and full year earnings report on Thursday, August 31. The company's revenue declined for the eleventh consecutive quarter.

Revenue for the quarter was $1.66 billion, falling 1% from $1.67 billion during the prior year's quarter. For the full year, the company reported revenue of $7.89 billion, down from $7.96 billion during the prior year.

"The operating environment for the packaged foods industry remains challenging due to shifting demographics, changing consumer preferences for food, the adoption of new shopping behaviors and the dynamic retailer landscape," said Campbell's President and CEO Denise Morrison. "In these times, sales growth remains a challenge. Despite multiple headwinds, we finished the year within our guidance and delivered another year of growth in adjusted EBIT and adjusted EPS."

Campbell's posted quarterly net earnings of $318 million. During the same quarter last year, the company posted a loss of $81 million. The company's net earnings for the full year were $887 million.

The Camden, New Jersey-based company is comprised of three divisions: Americas Simple Meals and Beverages, Global Biscuits and Snacks and Campbell Fresh. Sales in the Americas Simple Meals and Beverages and Campbell Fresh segments fell 1% and 5% respectively for the full year while Global Biscuits and Snacks saw a slight upturn. The company issued sales guidance in its latest earnings report indicating that it expects continued decline in overall sales of up to 2% for the upcoming year.

Campbell Soup Company (CPB) shares ended the week at $45.39, down 11.9% for the week.

Lululemon Earnings Beat Expectations

Lululemon Athletica, Inc. (LULU) released its quarterly earnings report on Thursday, August 31. The athleticwear company reported increased sales.

The company posted revenue of $581 million for the quarter. This is up 13% over revenue of $515 million during the same time last year and exceeded analysts' estimated revenue of $568 million.

Net income for the quarter was $48.7 million, or $0.36 per share. This is down slightly from $53.6 million, or $0.39 during the same time last year.

Lululemon has shown steady growth over recent quarters even as other popular athletic brands have struggled. Known primarily for its women's apparel, the company has begun to increase its focus on its line of men's apparel. The company has announced that it will be rolling out its first marketing campaign targeted toward men in September.

Lululemon Athletica, Inc. (LULU) shares ended the week at $61.69, up 1.6% for the week.

The Dow started the week of 8/28 at 21,833 and closed at 21,988 on 9/1. The S&P 500 started the week at 2,447 and closed at 2,477. The NASDAQ started the week at 6,286 and closed at 6,435.

Soft Jobs Report Pushes Treasury Yields Upward

Yields on U.S. Treasury bonds rose early on Friday in the wake of a lower-than-expected jobs report released by the Bureau of Labor Statistics on Friday, September 1. Bond yields had fallen earlier in the week in anticipation of the report.

Friday's jobs report showed an increase of 156,000 jobs for nonfarm payrolls in August, falling short of the consensus estimate of 180,000 new jobs. Unemployment moved slightly higher to 4.4%.

"Obviously it is a little bit softer than expected, but I don't think it changes the outlook for the Fed," said NatWest senior U.S. economist Kevin Cummings. "I don't think this is going to derail them from earlier guidance of one rate hike per quarter."

The yield on the benchmark 10-year Treasury note opened the week at 2.18% before dipping to 2.12% at the end of the day on Thursday. During early trading on Friday, however, the yield had risen to 2.16%.

Also released on Friday was the University of Michigan's Consumer Sentiment Index, which was at 96.8 for August. This is up from 93.4 in July, but lower than earlier expectations in August.

"Consumer confidence has remained at a very favorable level, although slipping somewhat from mid-month," said Richard Curtin, chief economist in charge of the University of Michigan survey. "The Sentiment Index has been higher during the first eight months of 2017 than in any year since 2000, which was the peak year of the longest expansion in U.S. history."

The 10-year Treasury note yield finished the week of 8/28 at 2.16%, while the 30-year Treasury note yield was 2.77%.

Mortgage Rates Fall Once Again

Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, August 31. Mortgage rates continued their downward trajectory.

The 30-year fixed rate mortgage averaged 3.82% this week, down from last week's average of 3.86%. Last year at this time the 30-year fixed rate mortgage averaged 3.46%.

The average on the 15-year fixed rate mortgage for the week was 3.12%, down from 3.16% last week. During this time last year, the 15-year fixed rate mortgage averaged 2.77%.

"The 10-year Treasury yield fell to a new 2017-low on Tuesday," said Freddie Mac chief economist Sean Becketti. "In response, the 30-year mortgage rate dropped 4 basis points to 3.82%, reaching a new year-to-date low for the second consecutive week. However, recent releases of positive economic data could halt the downward trend of mortgage rates."

Based on published national averages, the money market account finished the week of 8/28 at 0.64%. The 1-year CD finished at 1.41%.